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Minnesota Minimum Wage Rise Nears Approval

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ST. PAUL, Minn. (AP) — Minnesota is on the cusp of adopting one of the nation’s highest minimum wages after the Senate voted Wednesday to gradually boost it to $9.50 per hour.

The 35-31 vote, with three Democrats joining all Republicans in opposition, brings the bill a step from a supportive Gov. Mark Dayton. The House planned to vote on the measure Thursday.

The state would push its floor wage from $6.15 per hour now to $9.50 by 2016, with increases after that tied to inflation. The raises come in three steps, starting with a bump to $8 this August, then $8.50 in 2015 followed by another increase of a dollar.

Sen. Jeffrey Hayden, DFL-Minneapolis, said the increase won’t solve all problems for those at the bottom of the economic rung. But, he said, Minnesota would “at least have a floor that starts to get them toward a living wage.”

State data shows that as many as 350,000 people could be in line for a bigger paycheck, 60 percent of them women.

Minnesota is one of four states currently beneath the federal minimum wage of $7.25, though many workers automatically receive the federal rate. Some workers such as baby-sitters, taxi drivers, nonprofit volunteers and others are exempt from the minimum wage. The Minnesota wage hasn’t gone up since 2005.

When fully phased in, the new wage could be in the nation’s top five. Washington state currently leads at $9.32 per hour, but Connecticut and Maryland recently enacted laws to get to $10.10 within a few years.

With Congress showing little movement on President Barack Obama’s plea to raise the federal minimum wage to $10.10, many states have been plowing ahead independently. According to the National Conference of State Legislatures, 34 states have had minimum wage increase bills before them this year. Advocates have been successful in four so far –West Virginia and Delaware as well as Connecticut and Maryland.

Minnesota’s rate would be linked to inflation, capped at 2.5 percent per year, providing annual raises from 2018 forward. If economic conditions deteriorate, the Department of Labor and Industry under a future governor could suspend the formula.

The bill actually lays out several minimum wages, expanding a tiered structure the state currently has. Businesses with gross sales beneath $500,000 will see the wage top out at $7.75 in 2016. Workers younger than 20 would be subject to a lower training wage and companies could continue paying 16 and 17 year olds less.

Business groups, from retailers to grocers to restaurant owners, pushed back against the wage hike in letters to Minnesota lawmakers. They argued an increase could backfire if employers have to reduce hours or introduce more automation for tasks people now perform.

Sen. Dan Hall, R-Burnsville, questioned why Minnesota has a minimum wage at all as he railed against the steep increase.

“The minimum wage is a false hope. It tells many people you’re going to get more money,” Hall said, arguing businesses will respond by cutting positions or raising prices to compensate.

Hall said workers shouldn’t depend on government to guarantee a certain wage. “If they’re worth more, they’ll get more,” he said. “Work harder, improve your skills, look for a better education or find another job.”

He and other Republicans failed in an attempt to throttle back the proposed increase by simply making Minnesota’s minimum wage meet the federal $7.25. All of Minnesota’s neighbors have minimum wages identical to the federal rate.

Sen. John Marty, DFL-Roseville, said the bill is an acknowledgment that people in the workforce are struggling to keep up in today’s economy. A full-time worker at $9.50 would earn less than $20,000 a year before taxes.

“This is a huge step forward, but I think we need to keep in mind that we are a long way from there,” Marty said. “You can’t live on $9.50 per hour.”